- AUD/USD defies the week-start gap down while rising to 0.6962 before a few minutes.
- Australia’s TD Securities Inflation grew more than prior, ANZ Job Advertisements also surge in May.
- S&P 500 Futures, US 10-year Treasury yields and Nikkei 225 print mild gains despite virus woes, US-China tussle.
- US data, risk catalysts will be in focus as American traders will return from the extended weekend.
Australia’s TD Securities Inflation for June flashed upbeat figures on the yearly as well as monthly basis. While the YoY statistics crossed 0.1% prior to 0.7%, the MoM print reversed the previous -1.2% contraction with +0.6% figures. Further, the ANZ Job Advertisements surged a whopping 42% versus 0.5% prior on MoM.
Other than the upbeat data, the Aussie pair also takes clues from the mildly positive risk barometers like S&P 500 Futures, US 10-year Treasury yields and stocks in Asia-Pacific. S&P 500 Futures gain over 0.50% to 3,146 while the US bond yields add 1.5 basis points (bps) to 0.686% as we write. Moving on, Japan’s Nikkei mark near 1.0% gains to 22,530 but Australia’s ASX 200 drops 0.40% to 6,033 by the press time.
The risk gauges might be taking clues from US President Donald Trump’s refrain to respect the latest surge in the coronavirus (COVID-19) numbers. Also could be considered as a reason for the market’s upbeat performance is the traders’ readiness for the US session opening as American players got very little time cheering June month’s employment data before going on the Independence Day holiday.
On the contrary, border close in Australia’s New South Wales and Victoria joins the broad pessimism concerning the pandemic. Further, the US aircraft exercise in the South China Sea also questions the current risk-on sentiment. Additionally, the New Delhi-Beijing tension and no major updates on the virus vaccine also exert downside pressure on the market mood.
Although the market’s behavior will be the key to forecast near-term pair moves amid a light calendar, the US ISM Non-Manufacturing PMI for June, expected 49.5 versus 45.4 prior, will also be important to watch. Should the data clear 50.00 level that separates activity contraction from otherwise, bulls could extend the run-up towards 0.7000 psychological mark.
Technical analysis
The pair’s ability to stay positive beyond 21-day SMA, currently around 0.6910, enables the bulls to aim for the upper-end of a three-week-old ascending triangle, at 0.6975 now, before attacking the 0.7000 threshold. Meanwhile, 0.6900 restricts the pair’s immediate downside ahead of the said triangle’s support near 0.6865.
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